Barbados may be returning to the International Monetary Fund (IMF) to ask for assistance under one of its Precautionary fund facilities. Special Envoy to Prime Minister Mia Mottley on Investment and Financial Services Professor, Avinash Persaud, said the Government is looking to embrace as many life-saving safety nets against unexpected global health, economic, and natural disaster shocks as possible.
While not identifying a specific precautionary facility at this stage, Professor Persaud said that Government was considering the range of precautionary funds available within the IMF. He pointed out that the chosen one would add to an existing Bajan-styled safety net for debt relief, which Barbados is trying to convince the major countries to support. Additionally, the country has expressed interest in applying to the IMF for a precautionary fund to act as a buffer in the event the government needs to tap it for assistance.
Moreover, with the ongoing pandemic, the war on Ukraine, and effects of climate change, Professor Persaud argued that the more safety nets, emergency facilities and war chests available to the country, the better the Government can protect Barbadians and by extent, the economy.
On June 24, WiPay, a Caribbean payment solutions company, launched in the Cayman Islands, according to an interview conducted by WiPay founder and CEO Aldwyn Wayne, who expressed delight about the launch.
'I am excited because of the potential relationship with Digital Cayman and all the government initiatives that they are trying to find a solution for can be solved by our platform,' Wayne said.
Of note, Digital Cayman is a public sector body that supports companies seeking to establish a physical presence in the country while empowering the workforce in Cayman to pursue careers in technology and helping to guide regulatory and legislative change.
WiPay is positioning itself to fill a void that currently exists in the Cayman Islands in terms of the government's social payments to its population.
The largest number of expatriates living in the Cayman Islands were born in Jamaica, as such, this would facilitate an easy transfer of money via WiPay’s settlement network to loved ones back home. Mr. Wayne has stated that the transfer of money from Cayman to Jamaica through WiPay is going to be cheaper and quicker than using a bank transfer or a remittance company.
Leaders of the world’s biggest developed economies are weighing a cap on the price of Russian oil meant to strike at the main pillar of the Kremlin’s finances following its invasion of Ukraine — and to limit the havoc that high energy prices are wreaking worldwide.
Details haven’t been agreed at the Group of Seven summit in Elmau, Germany, but the basic idea would be to tie the price cap to the services that make trading oil possible. For instance, insurers would be barred from dealing with shipments that are above the cap, wherever it winds up being set.
Because such service providers are largely based in the European Union and United Kingdom, Russia would be expected to face difficulty finding large-scale workarounds. Limiting the price would reduce the Kremlin’s income from oil — at the start of the war, it was about $450Mn per day from Europe alone. The cap also would limit the impact of higher oil prices on inflation in consuming countries, with the cost of gasoline and diesel squeezing consumers and businesses.
Russia has been able to find buyers outside the West as Asian customers — like India and China — have replaced the EU as the biggest buyers of oil shipped by sea. Due to sanctions, Russian oil is trading at a steep discount to international benchmark Brent, fattening the profit margins of refiners in India who turn crude into gasoline. And some Russian oil sales have simply gone off the books.
Russia defaulted on its international bonds for the first time in more than a century, the White House and Moody's credit agency said, as sweeping sanctions have effectively cut the country off from the global financial system, rendering its assets untouchable.
The Kremlin, which has the money to make payments thanks to oil and gas revenues, has rejected the claims, and accused the West of driving it into an artificial default.
Some bondholders said they had not received overdue interest on June 27, 2022, following the expiration of a key payment deadline on June 26. Moody's credit agency later said that the missed coupon payment constituted a default. Russia has struggled to keep up payments on $40Bn of outstanding bonds since its invasion of Ukraine on Feb. 24.
Russia's finance ministry said it made the payments to its onshore National Settlement Depository (NSD) in euros and dollars, adding it had fulfilled obligations. On the other hand, credit rating agencies usually formally downgrade a country's credit rating to reflect default, but this does not apply in the case of Russia as most agencies no longer rate the country.
A formal default would be largely symbolic given Russia cannot borrow internationally at the moment and doesn't need to thanks to its oil and gas export revenues. However, the stigma would probably raise its borrowing costs in future.
The Jamaica Tourist Board (JTB) is projecting that the island will welcome approximately 800,000 visitors for the 2022 summer period (late June to the end of August) with destination earnings exceeding US$1.1Bn.
Director of Tourism, Donovan White, addressing the official ceremony to welcome the arrival of the inaugural flight from Quality Corporate Aircraft Services (QCAS) on June 22nd said the figures represent 85% of the pre-pandemic (2019) arrival levels, and more than 90% in revenues, respectively.
In light of this, the JTB has revised its forecast of a full recovery of the tourism sector to September 2023 from Q1 2024. The rebound reflects the work of the various stakeholders and the diversification of markets to attract more visitors to the island.
An increase in the length of stay by tourists and the average spend per visitor has also supported the recovery. The length of stay has now moved from an average 8 1/2 nights to 9.2 nights and the spend per visitor, per day, has also increased from US$169 to about US$182.
The news supports Jamaica’s recovery estimations and highlights its ability to have destination revenues outpace the recovery of visitors. The performance of the sector thus far has led the Ministry to be bullish about the sector recovering faster than initially expected.
The Bank of Mexico (Banxico) on June 23rd increased its benchmark interest rate by a record 75 basis points to 7.75%, noting that more rate hikes would be forthcoming, if necessary, as the central bank seeks to tame galloping inflation.
Banxico, has been raising rates as it tries to moderate spiraling consumer prices, having increased the benchmark rate by 375 basis points since mid-2021. Of note, domestic inflation hit an annualized rate of 7.88% in the first half of June 2022, well above the central bank's target of 3%, plus or minus one percentage point, data earlier in the day showed.
Thursday's move echoes the Federal Reserve's hike last week by three-quarters of a percentage point, its largest increase in more than 25 years, and comes as policymakers in regional powerhouse Brazil also raised rates to 13.25% and penciled in another hike for August.
Banxico underscored that in addition to inflationary shocks stemming from the COVID-19 pandemic, there are pressures linked to Russia's war in Ukraine and strict lockdown measures imposed by China. "The balance of risks for the trajectory of inflation within the forecast horizon is biased significantly to the upside," said Banxico.
In view of greater-than-anticipated pressures on prices, Banxico revised up its forecasts for headline and core inflation. However, the bank still expects inflation to converge to its 3% target in the first quarter of 2024. Carlos Morales, director, Latin America Sovereigns at Fitch Ratings projects that Banxico will hike rates to 8.5% by the end of 2022.
Brazil's central bank is aiming for inflation in 2023 "around" the 3.25% target but less than 4%, its chief, Roberto Campos Neto, said on June 23rd, as policymakers hike interest rates to cool surging consumer prices in Latin America's largest economy.
The Central Bank raised its key interest rate to 13.25% last week and penciled in another hike for August, as a measure to ensure inflation next year converged "around the target" rather than "to its target."
Campos Neto also reiterated the central bank's guidance that interest rates would rise and stay in significantly contractionary territory for longer to fight inflation. Consumer prices grew at an 11.7% rate in the 12 months through May, as such the strategy is necessary because of the uncertainty marking Brazil's inflation path.
Despite government proposals to lower fuel prices, Campos Neto said policymakers have not seen a relevant change in the balance of risks for inflation, which he indicated were still not tilted to the upside. However, on a more positive note, the central bank lifted its economic growth outlook for 2022 to 1.7% from 1%, on the back of a stronger-than-expected performance in the first quarter.
U.K. inflation hit 9.1% year-on-year in May as soaring food and energy prices continue to deepen the country’s cost-of-living crisis. The 9.1% rise in the consumer price index, released on June 22, 2022, was in line with expectations from economists in a Reuters poll and slightly higher than the 9% increase recorded in April.
Consumer prices rose by 0.7% month-on-month in May, slightly above expectations for a 0.6% rise but well short of the 2.5% monthly increase in April, indicating that inflation is slowing somewhat.
The largest upward contributions to the inflation rate came from housing and household services, primarily electricity, gas, and other fuels, along with transport (mostly motor fuel and second-hand cars). The Consumer Prices Index including owner occupiers’ housing costs (CPIH) came in at 7.9% in the 12 months to May, up from 7.8% in April. “Rising prices for food and non-alcoholic beverages, compared with falls a year ago, resulted in the largest upward contribution to the change in both the CPIH and CPI 12-month inflation rates between April and May 2022 (0.17 percentage points for CPIH),” the ONS said in its report.
The Bank of England last week implemented a fifth consecutive hike to interest rates, though stopped short of the aggressive hikes seen in the U.S. and Switzerland, as it looks to tame inflation, without compounding the current economic slowdown.
Ukraine became a candidate to join the European Union on Thursday, a bold geopolitical step triggered by Russia's invasion that Kyiv and Brussels hailed as an "historic moment".
Starting on the long path to EU membership will be a huge boost to morale in the embattled country, as Russian assaults on two cities in the eastern Donbas region move toward a "fearsome climax", according to a Ukrainian government adviser.
"Ukraine's future is in the EU," President Volodymyr Zelenskiy wrote on Twitter after the official announcement.
"A historic moment," European Council chief Charles Michel tweeted, adding: "Our future is together."
The approval of the Kyiv government's application by EU leaders meeting in Brussels will anger Russia as it struggles to impose its will on Ukraine. Moldova also became an official candidate on Thursday, signalling the bloc's intention to reach deep into the former Soviet Union.
Diplomats say it will take Ukraine a decade or more to meet the criteria for joining the EU. But European Commission President Ursula von der Leyen said she was convinced that Ukraine and Moldova will move as swiftly as possible to implement necessary reforms.
Their move to join the EU runs alongside applications by Sweden and Finland to enter NATO in the wake of the Russian invasion - indications that the Kremlin's military actions have backfired on its geopolitical aims.
A new zone for tourism development is being created from Oracabessa, St. Mary to Port Antonio, Portland, which will cater to high-end visitors to the island.
Minister of Tourism, Hon. Edmund Bartlett, said the zone will bring a “new awakening” to the country’s north coast and will follow a village-type tourism model with sophisticated facilities as opposed to an all-inclusive enclave setting.
Speaking at a welcome ceremony for the first scheduled commercial flight to the Ian Fleming International Airport in St. Mary from Providenciales, Turks and Caicos, on Thursday, June 16, Mr. Bartlett added that “the presence of this third international airport gives Jamaica the unique position in the region of being able to be connected within an hour from any point of entry into the country”.
This new tourism development adds to the Port Antonio redevelopment programme, which is also expected to breathe new life into the area. Owing to the aforementioned, the Ministry will be marketing the area differently and is already insisting that multi-storey buildings and high-density investment will not be allowed in the zone.
